by John Mathews, Economist
Why do you work? Do you work to live or live to work? Is how much you get paid important? These are all questions you may have. Maybe you don’t have a clue about pay and benefits. It’s time you did.
Yes, there are those lucky workers who love to do their jobs, but pay is the primary reason most people work. Pay is only part of compensation. What does that mean? When you work for a company you make a wage—a dollar figure per hour/week, or month. But there is more. There is also the value of the fringe benefits that your employer may provide. I’m speaking primarily of benefits like medical insurance, paid time off, and other items not included in your paycheck.
You may not think the benefits are all that important, but they are. Your employer is required by law to contribute/pay on your behalf only three things. First is the contribution to Social Security. Second is paying into the unemployment trust fund. Third is covering you in case of a work-related injury or illness—Worker’s Compensation Fund. These three are the only benefits employers are required to provide; but, in order to attract more well-qualified workers, employers may choose to offer other benefits as well.
Many employers provide medical insurance coverage for employees to help pay medical costs (illnesses, injuries, wellness programs, etc.). Medical costs are rising much faster than wages and inflation, making medical insurance a very desirable benefit for workers, and making it by far the most expensive fringe benefit employers may offer. Companies increasingly struggle to offer medical benefits to employees. Many times a worker will even work for lower pay at a company just because the company offers health insurance. Employers may pay the entire premium or share the cost with the employee. Some companies, because of the rising costs of healthcare, are cutting back on what they will pay, or lowering the level of coverage, just because it is so costly.
Other benefits that employers may provide include life insurance, dental insurance, vision insurance, paid holidays, paid vacation days, paid sick days, employee purchase plans, retirement benefits, and flexible scheduling/telecommuting.
Remember when you enter the world of work you have to understand that it’s not just about the hourly rate of pay, but also what benefits are offered. Be smart and understand the whole picture.
Medical insurance
Sick leave
Paid vacation
Paid holidays
Retirement plan
Life insurance
Flex time
Telecommuting
